A contract written in natural language describes the parties’ rights and obligations. It cannot, however, ‘do’ anything. It produces legal not physical effects. Traditional contracts do not instruct computers to perform any operations. Contracts expressed in code could. The question arises: can we convert contractual documents from being passive embodiments evidencing agreements into active files containing computer instructions? The ability to guarantee that contracts are performed as agreed, an idea underlying ‘smart contracts,’ depends on the ability to express obligations in code or, more specifically, on the ability of code to express obligations exactly as agreed. Not every obligation can, however, be encoded - be it due to its very nature or to the limited expressiveness of programming languages. Highlighting the interplay between form and substance, this paper presents the complexities involved in expressing contracts in code. Before contemplating the technical aspects of ‘smart contracts’ we must confront some preliminary questions: what are we trying to encode – and for what purpose? Can the entire contract be expressed in code? Should we focus on translating legal prose into code or on encoding specific tasks that serve to discharge obligations? This paper provides the groundwork for more ambitious projects in the area of ‘smart contracts.’
The advancement of technology brings tremendous challenges and opportunities to the legal industry. This article will examine the blockchain technology, in particular the decentralized autonomous organization (DAO) and its unique governance features compared with traditional companies. This article also intends to provide recommendations for law firms to prepare for the challenges brought by blockchain technology. Blockchain, challenges, decentralized autonomous organization, DAO, governance, law firm
Recently, Blockchain technology adoption has expanded to many application\nareas due to the evolution of smart contracts. However, developing smart\ncontracts is non-trivial and challenging due to the lack of tools and expertise\nin this field. A promising solution to overcome this issue is to use\nModel-Driven Engineering (MDE), however, using models still involves a learning\ncurve and might not be suitable for non-technical users. To tackle this\nchallenge, chatbot or conversational interfaces can be used to assess the\nnon-technical users to specify a smart contract in gradual and interactive\nmanner.\n In this paper, we propose iContractBot, a chatbot for modeling and developing\nsmart contracts. Moreover, we investigate how to integrate iContractBot with\niContractML, a domain-specific modeling language for developing smart\ncontracts, and instantiate intention models from the chatbot. The iContractBot\nframework provides a domain-specific language (DSL) based on the user intention\nand performs model-to-text transformation to generate the smart contract code.\nA smart contract use case is presented to demonstrate how iContractBot can be\nutilized for creating models and generating the deployment artifacts for smart\ncontracts based on a simple conversation.\n
Stylianos Tsarsitalidis, Marcelo Corrales Compagnucci, George Kousiouris, Alan Dahi
This chapter investigates the broad range of real-world applications of smart contracts and relevant rules associated with them by examining the requirements coming from supply chain management and the current technical landscape. Issues such as copyright protection, product delivery etc., have been enforced through various technological means. However, more dynamic means are now needed. The modern supply chain is a complex network of suppliers and creators and it has become increasingly difficult to control and track abnormal conditions occurring during manufacturing, delivery, sale, and management. This chapter will use the AffectUs:TagItSmart semantic and event detection framework as a use case example to demonstrate how the aforementioned concepts could be implemented with relevant pseudo-code that can be used as triggering logic or core rules in potential smart contracts for supply chains. The transformation of these rules and use of semantics will provide a more effective and multi-layered end-to-end supply chain solution that can aid in the integration with a smart contract rationale.
Case law is the term that refers to reports of past court decisions. It is considered an essential source of law, vital for legal professionals. Existing case law services are currently centralized, with an entity having complete control over the data and often charging fees for its access and other adding value services. This paper attempts to leverage the potential of blockchain technology in order to develop a public and decentralized platform that allows the submission of court decisions in a decentralized database and employs a network of curators who offer their validation, classification, and evaluation. Specifically, we design, analyze and implement AnyCase, a proof-of-concept prototype system on the Ethereum platform. We focus on the establishment of a sybil-resistant voting protocol used for reaching agreement and the development of a tokenized economy that incentivizes participation. Our preliminary analysis indicates that, besides being decentralized, AnyCase has the potential to compete with existing centralized systems in several other aspects.
Abstract This chapter focuses on how machine learning (ML) and distributed ledger technologies (DLTs) change the environment of the law, the substance of legal goods, and on the extent to which these changes affect legal protection. ML applications, for example, can decide a person's credit worthiness or employability. Moreover, DLTs can, for instance, self-execute transactions and policies without and beyond the law. One of the main challenges here thus concerns the regulatory effects of these novel technologies and the potential incompatibility of legal protection with techno-regulation (defined as the regulatory effects of a technology, whether or not intended). This challenge will be discussed in terms of automated compliance (‘legal by design’) and technological articulation of fundamental rights (‘legal protection by design’).
espanolSe ofrece una aproximacion critica, al tiempo que proactiva, a los denominados contratos inteligentes. Se examina el funcionamiento de la herramienta tecnologica. Se analizan cuestiones juridicas que suponen un reto a la hora de implementar programas informaticos cumpliendo con los requisitos legales establecidos por el Derecho de los contratos. Se concluye formulando algunas preguntas que propicien el debate juridico en torno a los llamados contratos inteligentes. EnglishThis paper offers a critical approach, while proactive, to the so-called smart contracts. We take a look to how the technological tool works. We analyze legal issues that pose a challenge when implementing computer programs that should accomplish with the legal requirements established by the law of contracts. We conclude by formulating some questions that propitiate the legal debate around the so-called smart contracts.
Most modern enterprise contract management systems deal with thousands of contracts. These applications are built to operate inclusively, i.e. preparing the contracts or editing the existing contracts within the application is quite easy. But, organizations also deal with various types of contracts outside such systems. Individuals working in the legal domain work on contracts stored mostly in word, pdf format. They usually work on these documents to generate various versions of the contracts. But sometimes, there exist physical contracts in the form of printed documents which needs to be digitized and fed into the system. If a contract management system provides the functionality of editing such contracts in the application, it poses a great challenge for the user to get them into the application, which might involve manual entry of contract from a physical document, copy/paste of content from a word/pdf file into the application. There exists no such intelligence to extract these clauses/content from physical documents, classify them with respect to many parameters such as applicable governing laws, the type of content present in the clauses such as Lease agreement, Sale deed, etc. and finally reuse them by having such clauses in a clause library. This smartness needs to be introduced into any CMS systems for seamless contract migration.
Tässä tutkielmassa käsitellään automatisoidun sopimustoiminnan toimintaympäristöä, lainsäädäntöä sekä teknologian hyötyjä. Tutkimuksen avulla halutaan selvittää, tuoko sopimusautomaatio ja smart contract -teknologia yrityksille sellaista hyötyä, että teknologia otetaan käyttöön sekä tulisiko tätä sopimustoimintaa säännellä Suomessa. Tutkimuksen tavoitteena on saada kokonaisvaltainen kuva smart contract -teknologian hyödyistä ja vaikutuksista sopimustoimintaan sekä nykyisistä epäselvyyksistä, jotta voidaan antaa ehdotuksia osa-alueista, joilla on tarve selkeyttävälle ohjeistukselle, oli se laki, alalle vakiintunut käytäntö tai muu vastaava. Smart contract -prosessia verrataan perinteiseen sopimusprosessiin, jotta hyödyille ja sääntelytarpeelle saadaan vertailupohjaa. Vertailtavia osa-alueita ovat sopimuksen syntyminen, osapuolten vastuut, oikeuslähteet ja oikeussuoja. Tutkimusaineisto koostuu oikeustoimilaista, laista sähköisen viestinnän palveluista, oikeuskirjallisuudesta ja artikkeleista saaduista havainnoista. Sopimustoiminta on kehittynyt alkuperäisestä nykyiseen ominaispiirteidensä osalta, sillä siitä on tullut sisällöllistä, dynaamista, yhteistoimintaa edistävää ja kollektiivista. Teknologian kehittyessä sopimustoiminta saa uusia toteutusmuotoja, kuten smart contract eli älysopimukset. Älysopimusta ei kuitenkaan säännellä erillisellä lailla Suomessa tai kansainvälisesti, joten sen käyttöön liittyy epäselvyyksiä. Teknologia hakee muotoaan ja kehittyy koko ajan mutta yritykset eivät matalan käyttöasteen perusteella välttämättä edes tiedä sen hyödyistä ja mahdollisuuksista, sillä sitä ei osata hakeutua tutkimaan eikä sitä koeta turvalliseksi menettelyohjeiden ja avustavan toimielimen puuttuessa. Siksi teknologia tarvitsee tuekseen tunnettuutta, lisää tutkimusta ja selkeät menettelyohjeet. Suomi kuuluu EU-maiden parhaimpiin digiosaajiin ja sopimustoiminnan automatisointi on mahdollisuus, joka vie liiketoimintaa eteenpäin. Älysopimusten sääteleminen on kuitenkin varmasti hankalaa, sillä kaikki on vielä uutta ja selvittämätöntä. Tässä vaiheessa älysopimus toiminee parhaiten sopimuksentekovälineenä, jolla voidaan varmistaa osapuolten pitäytyminen velvoitteissaan, joten erillinen lainsäädäntö ei ole tarpeellista mutta jonkinlainen menettelyohjeistus sen sijaan on. Lainsäätäjien ja yritystoimijoiden on kuitenkin luotava teknologiasta kokonaisuus ymmärtääkseen sen mahdollisuuksia. Teknologian ja mahdollisen sääntelyn kehityttyä smart contract voisi useammassa tilanteessa toimia pätevänä sopimuksena ja toteuttaa kehittymisen tarkoitustaan.
Abstract Smart contracts are innovative contracts that differ from traditional ones in that they are self-executing, as they entail the possibility of representing contract terms in programming code that gets automatically executed on a blockchain or other distributed ledgers. Following the latest developments in blockchain technology, smart contracts have been the focus of growing attention and are currently among the major innovations that are taking place in financial services. This paper investigates the scope for their application in insurance both in the near and longer term, exploring the legal challenges that they pose. The analysis shows that in the near term smart contracts will be mainly exploited to automate underwriting, claims handling and payouts. It considers how the automation of these processes will operate at law and emphasises the impact that smart contracts can have especially on the reduction of transaction costs and on the very essence of the insurance contract—the insurer’s promise to pay. Building on current technological developments, the paper then turns to role that smart contracts can play in insurance in the longer term, advancing the prospect of the automation of the entire insurance contract. In particular, it argues that the interaction between smart contracts and artificial intelligence and machine learning can challenge traditional frameworks of thought such as incomplete contracting and, in the farther-distant future, will culminate in contracts that will both self-interpret and self-enforce their terms—what can be called the true smart contracts. The analysis identifies and addresses the main legal issues that can arise in this context, exploring how to strike a balance between the goal of fostering innovation and the need to ensure policyholder and investor protection.
The Smart Contract Templates project supports legally enforceable smart contracts, using operational parameters to connect legal agreements to standardised code. The standardised code is derived from legal documentation and performs some or all of the provisions of that contract. For financial contracts such as derivatives agreements, the legal documentation may be extensive, and the standardised code to perform the contract may be substantial. An important issue is how to validate whether the smart contract code will correctly perform the provisions of the legal contract. This requires an understanding of the semantics of legal text and is an important step towards supporting industry adoption of legally enforceable high-value smart contracts.
Bakgrund: Satoshi Nakamoto kallas gruppen eller individen bakom kryptovalutan Bitcoin. Syftet med valutan är att kunna genomföra transaktioner snabbt, anonymt och kunna hålla tredje part, centralbanker och banker utanför. Syfte: Syftet är att undersöka och analysera svenska bankers inställning till Bitcoin. Det författarna till denna studie vill undersöka är hur bankens inställning ser ut till valutan om den blir allt mer populär att företag och privatpersoner börjar genomföra transaktioner utan inblandning med banken. Metod: För att kunna svara på syftet har studien genomförts med en abduktiv metod. Datainsamling har skett genom att intervjua relevanta personer på banker genom semistrukturerade intervjuer. I analysen förklaras sedan den datainsamlingen utifrån studiens teoretiska referensram. I syfte att få kvalificerade bedömningar om framtiden har studien använt sig av delfi-metoden. Slutsats: Författarna till studien kom fram till att Bitcoin inte utgör något hot mot bankerna eftersom de kan kopiera tekniken och bankens kärnverksamhet handlar inte bara om att genomföra transaktioner. Den underliggande tekniken till Bitcoin tillsammans med en mer legitimerad valuta (exempelvis e-krona) har en möjlighet att användas av banker i framtiden.
Adam Watson, Regis Rukundakuvaga, Khachatur Matevosyan
Automated Case Management Systems are still at an early stage of adoption in many developing countries. These are frequently standalone systems implemented with donor financing, and they often fail due to capacity constraints or as a consequence of short-term, project-based funding. But there are examples of developing countries overcoming these pitfalls and producing innovative solutions that surpass government practices in more developed countries. The Integrated Electronic Case Management System (IECMS), developed and implemented by the Ministry of Justice of Rwanda from 2015-2016, is one such innovation. This system has progressed rapidly in its level of adoption and integration between law enforcement, the prosecutor’s office, courts, and corrections. This paper will discuss the key system functionalities and the implementation methodology, including both the benefits and shortcomings of this approach, with the goal of applying lessons learned in future installations. Foremost among the successes of this project were the integrated Sector Wide Approach, the thorough business process re-engineering, and strong ownership by the Rwandan Justice Sector staff. Particularly instructive will be the analysis of the integrated approach, covering five institutions with a single system in less than two years. However, the particular success in this case may not be replicable for governments with a more decentralized approach.
As currently understood and used, "smart contracts" are merely a means to execute the terms of a full legal contract. This paper, however, proposes the creation of a semantic legal layer to support blockchain based legal contracts. Some of the primary challenges to such an implementation, including the need to develop robust, jurisdiction- specific legal ontologies, and develop means to preserve the evidentiary character of records leading up and proving contract formation, are considered. Particular attention is given to the particular challenges posed - and purposes behind - the use of legal language in contract drafting, with consideration of ways to utilize distributed ledger and linked data technology to leverage that specialist language for a broader base of contracting parties.
The law speaks clearly on the standards of proof, but listeners often misunderstand its words. This article tries, with some common sense, to explain how the law expects its standards to be applied, and then to show how the law thereby avoids such complications as the conjunction paradox. First, in accordance with belief function theory, the factfinder should start at zero belief. Given imperfect evidence, the factfinder will end up retaining a fair amount of uncommitted belief. As evidence comes in, though, the factfinder will form a belief in the truth of the disputed fact but also form a disbelief, or a belief in the fact’s falsity. At the close of evidence, the standard of proof requires only comparing belief and disbelief. For example, the civil standard, rather than asking whether a fact more likely than not happened according to traditional probability theory, asks whether the factfinder believes the fact more than the factfinder believes that the fact did not happen. The burdened party need not push proof above 50% by dispelling the phantoms of every possibility, while the opponent need not generate a competing version of truth but can instead rely on denial to demand that the burdened party generate a belief.Second, belief and disbelief being nonadditive partial truths, the mathematical result is that one cannot combine beliefs by traditional probability theory, as by using the product rule designed for conjunction of betting odds. Instead, one must use multivalent logic, including its rule that conjoined likelihood equals the likelihood of the least likely element. Linking the elements in a chain tells a story that is as likely as its weakest link. Consequently, if each element of a claim or defense passes the standard of proof, the conjunction of elements will pass the standard of proof. The conjunction paradox thus vaporizes for factfinding, just as the law has always maintained. The law has found the way to decide in accord with our best knowledge of the facts.
Bitcoin and other cryptocurrencies are getting into common usage more and more frequently. Unfortunately this spread is connected with attempts to misuse their principles for personal benefit. The goal of this thesis is to explain the main principles of using bitcoin in relation to the internet identity. This connection is represented by two sources in the thesis: the first is a bitcoin blockchain, the second is the sum of various user profiles used in discussion forums and similar websites. The aim is to create and explain the process how to, by using the combination of this two sources, reveal the identity of a human using cryptocurrencies for payment (from a private person point of view). First, methods used for extraction of correct and useful data from the blockchain and internet profiles must be developed to be able to mine data from the joint database, merging into a full user profile containing personal data. Results of this investigation are extended by the rules of preserving anonymity on the internet, containing both technological and behavioural measures avoiding a share of personal data. The end of this thesis explains possible attack vectors that might be used for compromising cryptocurrencies. The methods of searching of the internet identity are a useful tool for facing these attacks.